The Federal Deposit Insurance Corporation (FDIC) is demanding that three companies and certain of their officers cease and desist from making false and misleading statements about FDIC deposit insurance.
Specifically, the FDIC is demanding that Bodega Importadora de Pallets, Money Avenue, LLC, and OKCoin USA, Inc. take immediate corrective action to address these false or misleading statements.
Based upon evidence collected by the FDIC, the companies and certain officers made false representations. For example, according to the FDIC, the companies allegedly stated or suggested that they are FDIC-insured and that uninsured financial products are insured by the FDIC. Also, said the FDIC, they misused the FDIC name or logo, misrepresented the nature or extent of deposit insurance, and/or failed to identify insured depository institutions with which it has a relationship for the placement of customer deposits and into which funds can be deposited.
“The FDIC has observed an increasing number of instances online where firms or individuals have misused the FDIC’s name or logo or have made false or misleading representations about deposit insurance,” FDIC Chairman Martin Gruenberg said. “These practices can confuse consumers about whether they are dealing with an insured institution and if they are protected by deposit insurance.”
These statements are in violation of the Federal Deposit Insurance Act (FDI Act), which prohibits any person from representing or implying that an uninsured financial product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act also prohibits companies from implying that they are FDIC-insured or their products are FDIC–insured by using “FDIC” in the company’s name, advertisements, or other documents.
The FDIC sent cease and desist letters to each of these companies and the appropriate officers.
The FDIC is authorized by the FDI Act to enforce this prohibition against any person. FDIC deposit insurance protects customers in the unlikely event of the failure of an insured financial institution. To determine if an institution is FDIC–insured, ask a representative of the institution, look for the FDIC sign at the bank, or use the FDIC’s BankFind tool.